Personal allowance to be raised up to £9,205 from April 2013; this is a move according to the government that will make 24 million people £220 a year better off. But 300,000 more people will be drawn into the higher rate – 40% – tax band from 2013/14 as the threshold is brought down from £42,475 to £41,450. The biggest move in terms of income tax is the cut in top rate income tax rate from 50p to 45p

Corporation tax

Corporation tax will receive a cut to 24%from next month.By 2014 it will be 22%.There’s also a suggestion for a consultation on simplifying the tax system for small firms with a turnover of up to £77,000.

Pensioners

At present, the over people over the age of 65 can earn £10,500 before tax, while those over 75 can earn 10,660, but those age-related allowances will be removed for new pensioners from April 2013. Allowances for those already of pension age will be frozen until the personal allowance for the rest of the population catches up.

Child benefit

The child benefit restrictions planned earlier has been relaxed. The child benefit threshold now is £50000.00. When someone in a household has an income of more than £50,000, the child benefit will fall by 1% for every £100 earned over £50,000. Anyone earning more than £60,000 will lose the benefit completely

Loopholes and anomalies with regards to VAT to be removed – including removing exemptions for sports nutrition drinks and hot takeaway products in supermarkets. Self-storage, static caravans and hairdressers’ chairs will also no longer be exempt. Existing VAT exemptions will remain for food, children’s clothes, books and newspapers.

Borrowing

Borrowing this year is expected to be £126bn. This is £1bn less than forecast in the autumn. The forecast is expected to fall to £21bn by 2016-17. Consultation to be held on offering gilts, government bonds, with maturity terms of more than 50 years to take advantage of current low interest rates.